Attached files
| file | filename |
|---|---|
| EX-32.1 - Ecco Auto World Corp | ex32-1.htm |
| EX-31.1 - Ecco Auto World Corp | ex31-1.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X]
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For The Nine Months Period Ended December 31, 2018
or
[ ]
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___________ to ____________
Commission File Number 333-218334
ECCO AUTO WORLD CORPORATION
(Exact name of registrant issuer as specified in its charter)
| Nevada | 30-0943638 | |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
Unit C, 4/F, China Insurance Building, 48 Cameron Road,
Tsim Sha Tsui, Kowloon, Hong Kong.
(Address of principal executive offices, including zip code)
Registrant’s phone number, including area code +852 3182 6922
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
YES [X] NO [ ]
Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (section 232.405 of this chapter) during the preceding twelve months (or shorter period that the registrant was required to submit such files).
YES [ ] NO [X]
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer [ ] Accelerated filer [ ] Non-accelerated filer [ ] Smaller reporting company [X]
Emerging growth company [X]
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes [ ] No [X]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has fled all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.
N/A
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
| Class | Outstanding at February 14, 2019 | |||
| Common Stock, $.0001 par value | 93,089,643 | |||
TABLE OF CONTENTS
PART I – FINANCIAL INFORMATION
ITEM 1. UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
ECCO AUTO WORLD CORPORATION
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
| F-1 |
ECCO AUTO WORLD CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
As of December 31, 2018 and March 31, 2018
(Currency expressed in United States Dollars (“US$”), except for number of shares)
As of December 31, 2018 | As of March 31, 2018 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| ASSETS | ||||||||
| CURRENT ASSETS | ||||||||
| Prepayment | 15,250 | 2,658 | ||||||
| Cash and cash equivalents | 55,397 | 76,362 | ||||||
| Total Current Assets | 70,647 | 79,020 | ||||||
| NON-CURRENT ASSETS | ||||||||
| Equipment, net | 2,864 | 3,412 | ||||||
| TOTAL ASSETS | $ | 73,511 | $ | 82,432 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| CURRENT LIABILITIES | ||||||||
| Other payables and accrued liabilities | 1,580 | 14,500 | ||||||
| Due to related parties | 2,800 | 1,000 | ||||||
| Total Current Liabilities | 4,380 | 15,500 | ||||||
| TOTAL LIABILITIES | $ | 4,380 | $ | 15,500 | ||||
| STOCKHOLDERS’ EQUITY | ||||||||
| Preferred stock, $0.0001 par value; 200,000,000 shares authorized; None issued and outstanding Common Stock, par value $0.0001; 600,000,000 shares authorized, 93,089,643 and 92,556,310 issued and outstanding as of December 31, 2018 and March 31, 2018 | 9,309 | 9,255 | ||||||
| Additional paid in capital | 622,147 | 462,201 | ||||||
| Accumulated losses | (560,944 | ) | (404,914 | ) | ||||
Accumulated other comprehensive (expense)/income | (1,381 | ) | 390 | |||||
| TOTAL STOCKHOLDERS’ EQUITY | $ | 69,131 | $ | 66,932 | ||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 73,511 | $ | 82,432 | ||||
See accompanying notes to condensed consolidated financial statements.
| F-2 |
ECCO AUTO WORLD CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF OPERATION AND COMPREHENSIVE INCOME
For the nine months ended December 31, 2018 and 2017
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(Unaudited)
| Three
Months Ended December 31 | Nine
Months Ended December 31 | |||||||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||||||
| REVENUE | $ | - | $ | 4,500 | $ | - | $ | 4,500 | ||||||||
| COST OF REVENUE | $ | - | $ | 4,000 | $ | - | $ | 4,000 | ||||||||
| GROSS PROFIT | $ | - | $ | 500 | $ | - | $ | 500 | ||||||||
| OTHER INCOME | $ | 18 | $ | 1,327 | $ | 26 | $ | 1,325 | ||||||||
| GENERAL AND ADMINISTRATIVE EXPENSES | $ | (10,195 | ) | $ | (123,240 | ) | $ | (156,056 | ) | $ | (131,587 | ) | ||||
| LOSS BEFORE INCOME TAX | $ | (10,177 | ) | $ | (121,413 | ) | $ | (156,030 | ) | $ | (131,087 | ) | ||||
| INCOME TAX PROVISION | $ | - | $ | - | $ | - | $ | - | ||||||||
| NET LOSS | $ | (10,177 | ) | $ | (121,413 | ) | $ | (156,030 | ) | $ | (129,762 | ) | ||||
| OTHER COMPREHENSIVE LOSS | $ | (3 | ) | $ | - | $ | (1,771 | ) | $ | - | ||||||
| TOTAL COMPREHENSIVE LOSS | $ | (10,180 | ) | $ | (121,413 | ) | $ | (157,801 | ) | $ | (129,762 | ) | ||||
| Net loss per share, basic and diluted: | $ | - | $ | - | $ | - | $ | - | ||||||||
| Weighted average number of common shares outstanding – Basic and diluted | 93,089,643 | 91,518,030 | 92,784,431 | 90,654,250 | ||||||||||||
See accompanying notes to condensed consolidated financial statements.
| F-3 |
ECCO AUTO WORLD CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY
For the nine months ended December 31, 2018
(Currency expressed in United States Dollars (“US$”))
(Unaudited)
| COMMON STOCK | ADDITIONAL | ACCUMULATED OTHER | ||||||||||||||||||||||
| Number
of Shares | Amount | PAID-IN CAPITAL | COMPREHENSIVE INCOME/(EXPENSE) | ACCUMULATED DEFICIT | TOTAL EQUITY | |||||||||||||||||||
| Balance as of March 31, 2018 | 92,556,310 | $ | 9,255 | $ | 462,201 | $ | 390 | $ | (404,914 | ) | $ | 66,932 | ||||||||||||
| Private Placement @ $0.30 per shares | 533,333 | 54 | 159,946 | - | - | 160,000 | ||||||||||||||||||
| Foreign exchange translation adjustment | - | - | - | (1,771 | ) | - | (1,771 | ) | ||||||||||||||||
| Net loss for the year | - | - | - | - | (156,030 | ) | (156,030 | ) | ||||||||||||||||
| Balance as of December 31, 2018 | 93,089,643 | 9,309 | $ | 622,147 | $ | (1,381 | ) | $ | (560,944 | ) | $ | 69,131 | ||||||||||||
See accompanying notes to condensed consolidated financial statements.
| F-4 |
ECCO AUTO WORLD CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
For the nine months ended December 31, 2018 and 2017
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(Unaudited)
| Nine Months Ended | ||||||||
| December
31, 2018 |
December 31, 2017 |
|||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net loss | $ | (156,030 | ) | $ | (129,762 | ) | ||
| Adjustment to reconcile net loss to net used in operating activities: | ||||||||
| Depreciation of equipment | $ | 548 | $ | 61 | ||||
| Changes in operating assets and liabilities: | ||||||||
| Prepayment | $ | (12,592 | ) | $ | - | |||
| Other payables and accrued liabilities | $ | (12,920 | ) | $ | (22,000 | ) | ||
| Due to related parties | $ | 1,800 | $ | 3,242 | ||||
| Net cash used in operating activities | $ | (179,194 | ) | $ | (148,459 | ) | ||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
| Purchase of equipment | $ | - | $ | (3,656 | ) | |||
| Net cash used in investing activities | $ | - | $ | (3,656 | ) | |||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Issuance of share capital | $ | 160,000 | $ | 250,447 | ||||
| Net cash provided by financing activities | $ | 160,000 | $ | 250,447 | ||||
| Effect of exchange rate changes on cash and cash equivalents | $ | (1,771 | ) | $ | - | |||
| Net (decrease)/increase in cash and cash equivalents | $ | (20,965 | ) | $ | 98,332 | |||
| Cash and cash equivalents, beginning of period | $ | 76,362 | $ | 16,202 | ||||
| CASH AND CASH EQUIVALENTS, END OF PERIOD | $ | 55,397 | $ | 114,534 | ||||
| SUPPLEMENTAL CASH FLOWS INFORMATION | ||||||||
| Income taxes paid | $ | - | $ | - | ||||
| Interest paid | $ | - | $ | - | ||||
See accompanying notes to condensed consolidated financial statements.
| F-5 |
ECCO AUTO WORLD CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the nine months ended December 31, 2018
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(Unaudited)
1. DESCRIPTION OF BUSINESS AND ORGANIZATION
ECCO Auto World Corporation is organized as a Nevada limited liability company, incorporated on June 6, 2016. For purposes of consolidated financial statement presentation, ECCO Auto World Corporation and its subsidiary are herein referred to as “the Company” or “we”. The Company is a business whose planned principal operations are to develop and operate an Automobile mobile application or a platform to connect auto repair shops and car owners.
On June 7, 2017, the Company acquired 100% interest in ECCO Auto World Corporation, a private limited liability company incorporated in Labuan, resulting in the latter becoming a wholly-owned subsidiary company of the Company.
Details of the Company’s subsidiary:
| Company name | Place and date of incorporation | Particulars of issued capital | Principal activities | |||||
| 1. | ECCO Auto World Corporation | Labuan, March 1, 2017 | 100 shares of ordinary share of US$1 each | Investment holding |
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of presentation
The accompanying condensed consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”).
On June 30, 2018, the the Company’s Board of Directors had approved a change in fiscal year end from February 28th to March 31st. Following such change, the date of the Company’s next fiscal year end is March 31st, 2019.
Basis of consolidation
The condensed consolidated financial statements include the accounts of the Company and its subsidiary. All inter-company accounts and transactions have been eliminated upon consolidation.
Use of estimates
Management uses estimates and assumptions in preparing these consolidated financial statements in accordance with US GAAP. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities in the balance sheet, and the reported revenue and expenses during the periods reported. Actual results may differ from these estimates.
Revenue recognition
In accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 605, “Revenue Recognition”, the Company recognizes revenue from sales of goods when the following four revenue criteria are met: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3) selling price is fixed or determinable; and (4) collectability is reasonable assured.
Revenue is measured at the fair value of the consideration received or receivable, net of discounts and taxes applicable to the revenue.
| F-6 |
ECCO AUTO WORLD CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the nine months ended December 31, 2018
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(Unaudited)
The Company derives its revenue from provision of car maintenance and servicing scheduling and optimization advisory services. The services are billed on a fixed-fee basis.
Cost of revenue
Cost of revenue includes the cost of consultation services of Automobile mobile application and related services.
Cash and cash equivalents
Cash and cash equivalents are carried at cost and represent cash on hand, demand deposits placed with banks or other financial institutions and all highly liquid investments with an original maturity of three months or less as of the purchase date of such investments.
Property and equipment
Property and equipment is stated at cost less accumulated depreciation and impairment. Depreciation of plant and equipment are calculated on the straight-line method over their estimated useful lives as follows:
| Classification | Estimated useful lives | |
| Computer and peripherals | 5 years |
Expenditures for maintenance and repairs are expenses as incurred.
Income taxes
Income taxes are determined in accordance with the provisions of ASC Topic 740, “Income Taxes” (“ASC Topic 740”). Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the periods in which those temporary differences are expected to be recovered or settled. Any effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.
ASC 740 prescribes a comprehensive model for how companies should recognize, measure, present, and disclose in their financial statements uncertain tax positions taken or expected to be taken on a tax return. Under ASC 740, tax positions must initially be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions must initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts.
The Company conducts major businesses in Malaysia and Hong Kong, and is expanding to China and Thailand. The Company is subject to tax in these jurisdiction. As a result of its business activities, the Company will file tax returns that are subject to examination by the foreign tax authority.
Net income/(loss) per share
The Company calculates net income/(loss) per share in accordance with ASC Topic 260, “Earnings per Share.” Basic income/(loss) per share is computed by dividing the net income/(loss) by the weighted-average number of common shares outstanding during the period. Diluted income per share is computed similar to basic income/(loss) per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common stock equivalents had been issued and if the additional common shares were dilutive.
Foreign currencies translation
Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the Condensed Consolidated Statements of Operations and Comprehensive Income.
| F-7 |
ECCO AUTO WORLD CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the nine months ended December 31, 2018
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(Unaudited)
The reporting currency of the Company and its subsidiary is United States Dollars (“US$”) and the accompanying financial statements have been expressed in US$.
In general, for consolidation purposes, assets and liabilities of its subsidiary whose functional currency is not US$ are translated into US$, in accordance with ASC Topic 830-30, “Translation of Financial Statement”, using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements of foreign subsidiary are recorded as a separate component of accumulated other comprehensive income within the statements of stockholders’ equity.
Fair value of financial instruments
The carrying value of the Company’s financial instruments: cash and cash equivalents, and accounts payable and approximate their fair values because of the short-term nature of these financial instruments.
The Company also follows the guidance of the ASC Topic 820-10, “Fair Value Measurements and Disclosures” (“ASC 820-10”), with respect to financial assets and liabilities that are measured at fair value. ASC 820-10 establishes a three-tier fair value hierarchy that prioritizes the inputs used in measuring fair value as follows:
| Level 1: Observable inputs such as quoted prices in active markets; | |
| Level 2: Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and | |
| Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. |
Recent accounting pronouncements
The Company has reviewed all recently issued, but not yet effective, accounting pronouncements and do not believe the future adoption of any such pronouncements may be expected to cause a material impact on its financial condition or the results of its operations.
| F-8 |
ECCO AUTO WORLD CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the nine months ended December 31, 2018
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(Unaudited)
3. EQUIPMENT
As of December 31, 2018 | As of March 31, 2018 | |||||||
| Computer and peripherals | $ | 3,412 | $ | 3,656 | ||||
| Accumulated depreciation | (548 | ) | (244 | ) | ||||
| Equipment, net | $ | 2,864 | $ | 3,412 | ||||
Depreciation for the three and nine months period ended December 31, 2018 is $183 and $548 respectively.
Depreciation for the three and nine months period ended December 31, 2017 is $61 and $61 respectively.
4. COMMON STOCK
As of March 31, 2018, the Company has 92,556,310 shares issued and outstanding. There are no shares of preferred stock issued and outstanding as of March 31, 2018.
On August 24, 2018, Home Boutique International Limited subscribed 333,333 shares of common stock of the Company at $0.30 per share, for $100,000.
On September 26, 2018, Home Boutique International Limited further subscribed 200,000 shares of common stock of the Company at $0.30 per share, for $60,000.
All proceeds received are used for the Company’s working capital.
As of December 31, 2018, the Company has 93,089,643 shares issued and outstanding respectively. No preference stock were issued and outstanding.
| F-9 |
ECCO AUTO WORLD CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the nine months ended December 31, 2018
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(Unaudited)
5. OTHER PAYABLES AND ACCRUED LIABILITIES
As of December 31, 2018 | As of March 31, 2018 | |||||||
| Accrued audit fee | $ | - | $ | 9,000 | ||||
| Accrued professional fee | 80 | 5,500 | ||||||
| Accrued review fee | 1,500 | - | ||||||
| Total other payables and accrued liabilities | $ | 1,580 | $ | 14,500 | ||||
6. DUE TO RELATED PARTIES
The amount due to related parties are unsecured, interest-free with no fixed repayment term, for working capital purpose.
7. INCOME TAXES
For the nine months ended December 31, 2018, the local (United States) and foreign components of income/(loss) before income taxes were comprised of the following:
| Nine Months Ended | ||||||||
December 31, 2018 | December 31, 2017 | |||||||
| Tax jurisdictions from: | ||||||||
| - Local | $ | (148,543 | ) | $ | (130,345 | ) | ||
| - Foreign, representing | ||||||||
| Labuan | (7,487 | ) | 582 | |||||
| Loss before income tax | $ | (156,030 | ) | $ | (129,762 | ) | ||
The provision for income taxes consisted of the following:
| Nine Months Ended | ||||||||
| December 31, 2018 | December 31, 2017 | |||||||
| Current: | ||||||||
| - Local | $ | - | $ | - | ||||
| - Foreign | - | - | ||||||
| Deferred: | ||||||||
| - Local | - | - | ||||||
| - Foreign | - | - | ||||||
| Income tax expense | $ | - | $ | - | ||||
| F-10 |
ECCO AUTO WORLD CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the nine months ended December 31, 2018
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(Unaudited)
The effective tax rate in the periods presented is the result of the mix of income earned in various tax jurisdictions that apply a broad range of income tax rates. The Company has subsidiaries that operate in various countries: United States and Malaysia that are subject to taxes in the jurisdictions in which they operate, as follows:
United States of America
The Tax Cuts and Jobs Act was enacted in the United States on December 22, 2017. The Act reduces the US federal corporate tax rate from 35% to 21%, requires companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred, and creates new taxes on certain foreign sourced earnings. In December 2017, the SEC issued SAB 118, which directs taxpayers to consider the impact of the U.S. legislation as “provisional” when it does not have the necessary information available, prepared or analyzed (including computations) in reasonable detail to complete its accounting for the change in tax law.
As of December 31, 2018, the Company does not recognize any provisional amount for the transition tax.
We re-measured certain deferred tax assets and liabilities based on the rates at which they are anticipated to reverse in the future, which is generally 21%. However, we are still examining certain aspects of the Act and refining our calculations.
The Company is registered in the State of Nevada and is subject to the tax laws of the United States of America. As of December 31, 2018, the operations in the United States of America incurred $560,944 of cumulative net operating losses which can be carried forward to offset future taxable income. The net operating loss carryforwards begin to expire in 2036, if unutilized. The Company has provided for a full valuation allowance of $117,798 against the deferred tax assets on the expected future tax benefits from the net operating loss carryforwards as the management believes it is more likely than not that these assets will not be realized in the future.
Labuan
Under the current laws of the Labuan, ECCO Auto World Corporation is governed under the Labuan Business Activity Act, 1990. The tax charge for such company is based on 3% of net audited profit.
| F-11 |
8. CONCENTRATIONS OF RISK
The Company is exposed to the following concentrations of risk:
(a) Major customer
For the three and nine months ended December 31, 2018, the Company has not generated any revenue and doesn’t have any outstanding trade receivables.
For the three months ended December 31, 2017, the customers who accounted for 10% or more of the Company’s sales and its outstanding receivable balance at year-end are presented as follows:
| For Three Months Ended December 31 | ||||||||||||||||||||||||
| 2018 | 2017 | 2018 | 2017 | 2018 | 2017 | |||||||||||||||||||
| Revenue | Percentage of Revenue | Accounts Receivable, Trade | ||||||||||||||||||||||
| Customer A | $ | - | $ | 4,500 | - | 100 | % | $ | - | $ | 4,500 | |||||||||||||
| $ | - | $ | 4,500 | - | 100 | % | $ | - | $ | 4,500 | ||||||||||||||
For the nine months ended December 31, 2017, the customers who accounted for 10% or more of the Company’s sales and its outstanding receivable balance at year-end are presented as follows:
| For Nine Months Ended December 31 | ||||||||||||||||||||||||
| 2018 | 2017 | 2018 | 2017 | 2018 | 2017 | |||||||||||||||||||
| Revenue | Percentage of Revenue | Accounts Receivable, Trade | ||||||||||||||||||||||
| Customer A | $ | - | $ | 4,500 | - | 100 | % | $ | - | $ | 4,500 | |||||||||||||
| $ | - | $ | 4,500 | - | 100 | % | $ | - | $ | 4,500 | ||||||||||||||
(b) Major vendor
For three and nine months ended December 31, 2018, the Company has not incurred any cost of revenue and doesn’t have any outstanding trade payables.
For the three months ended December 31, 2017, the customers who accounted for 10% or more of the Company’s sales and its outstanding receivable balance at year-end are presented as follows:
| For Three Months Ended December 31 | ||||||||||||||||||||||||
| 2018 | 2017 | 2018 | 2017 | 2018 | 2017 | |||||||||||||||||||
Cost of Revenue | Percentage of Cost of Revenues |
Accounts Payable, Trade | ||||||||||||||||||||||
| Vendor A | $ | - | $ | 4,000 | - | 100 | % | $ | $ | 4,000 | ||||||||||||||
| $ | - | $ | 4,000 | - | 100 | % | $ | $ | 4,000 | |||||||||||||||
For the nine months ended December 31, 2017, the customers who accounted for 10% or more of the Company’s sales and its outstanding receivable balance at year-end are presented as follows:
| For Nine Months Ended December 31 | ||||||||||||||||||||||||
| 2018 | 2017 | 2018 | 2017 | 2018 | 2017 | |||||||||||||||||||
Cost of Revenue | Percentage of Cost of Revenues |
Accounts Payable, Trade | ||||||||||||||||||||||
| Vendor A | $ | - | $ | 4,000 | - | 100 | % | $ | $ | 4,000 | ||||||||||||||
| $ | - | $ | 4,000 | - | 100 | % | $ | $ | 4,000 | |||||||||||||||
The vendor is located in Malaysia.
(c) Exchange rate risk
The Company cannot guarantee that the current exchange rate will remain stable, therefore there is a possibility that the Company could post the same amount of income for two comparable periods and because of the fluctuating exchange rate actually post higher or lower income depending on exchange rate of RM converted into US$ on that date. The exchange rate could fluctuate depending on changes in political and economic environments without notice.
9. COMMITMENTS AND CONTINGENCIES
As of December 31, 2018, the Company has no commitments or contingencies involved.
10. RELATED PARTY TRANSACTIONS
For the nine months ended December 31, 2018 and 2017, the Company has the following of transacted amount with respective related parties:
|
Nine Months Ended December 31, 2018 |
Nine Months Ended December 31, 2017 | |||||||
| Asia UBS Global Limited (1) | ||||||||
| - Accounting Fee | $ | - | $ | 1,800 | ||||
| - Company Renewal Fee | 6,075 | 2,200 | ||||||
| GreenPro Financial Consulting Limited (2) | ||||||||
| - Professional Fee | 13,150 | 5,100 | ||||||
| Imocha Sdn Bhd (3) | ||||||||
- Cost of Revenue | - | 4,000 | ||||||
| - ECCO Mobile Application Development Cost | - | 100,000 | ||||||
| - Installation Cost | 125,000 | - | ||||||
| $ | 144,225 | $ | 113,100 | |||||
| (1) | Asia UBS Global Limited is a subsidiary of Greenpro Capital Corp. through its subsidiary Greenpro Venture Capital Limited owns approximately 4.30% of the Company issued and outstanding shares as of December 31, 2018. For the nine months ended December 31, 2018, the Company has incurred company renewal fees of $6,075. For the nine months ended December 31, 2017, the Company has incurred accounting fee and company renewal fees of $1,800 and $2,200 respectively. | |
| (2) | Greenpro Financial Consulting Limited is a subsidiary of Greenpro Capital Corp., through its subsidiary Greenpro Venture Capital Limited owns approximately 4.30% of the Company issued and outstanding shares as of December 31, 2018. For the nine months ended December 30, 2018 and 2017, the Company has incurred professional fees of $13,150 and $5,100 respectively. | |
| (3) | For the nine months ended December 31, 2018 and 2017, the Company has enter into and settle transaction with Imocha Sdn Bhd amounted to $125,000 and $100,000 regarding the mobile application development cost and installation cost. For the nine months ended December 31, 2017, the Company generated a revenue of $4,500 in which the cost of revenue amounted to $4,000 related to services provided by Imocha Sdn Bhd. Both the Company and Imocha Sdn Bhd share common director as summarize below: | |
| - Mr. Jason Wong Chee Hong, is the President, Secretary, Treasurer and Director of the Company; | ||
| - Mr. Koh Kok Wei, is the Director of the Company. | ||
11. SUBSEQUENT EVENTS
In accordance with ASC Topic 855, “Subsequent Events”, which establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued, the Company has evaluated all events or transactions that occurred after December 31, 2018 up through the date the Company presented these unaudited financial statements.
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The information contained in this quarter report on Form 10-Q is intended to update the information contained in our Annual Report on Form 10-K for the year ended February 28, 2017 and presumes that readers have access to, and will have read, the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and other information contained in such Form 10-K. The following discussion and analysis also should be read together with our consolidated financial statements and the notes to the consolidated financial statements included elsewhere in this Form 10-Q.
The following discussion contains certain statements that may be deemed “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements appear in a number of places in this Report, including, without limitation, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” These statements are not guarantees of future performance and involve risks, uncertainties and requirements that are difficult to predict or are beyond our control. Forward-looking statements speak only as of the date of this quarterly report. You should not put undue reliance on any forward-looking statements. We strongly encourage investors to carefully read the factors described in our Form S-1 Amendment No.8, dated July 20, 2016 in the section entitled “Risk Factors” for a description of certain risks that could, among other things, cause actual results to differ from these forward-looking statements. We assume no responsibility to update the forward-looking statements contained in this transition report on Form 10-Q. The following should also be read in conjunction with the unaudited Condensed Consolidated Financial Statements and notes thereto that appear elsewhere in this report.
Company Overview
ECCO Auto World Corporation, a Nevada corporation (“the Company”) was incorporated under the laws of the State of Nevada on June 6, 2016. On June 7, 2017, the Company acquired 100% interest in ECCO Auto World Corporation, a private limited liability company incorporated in Labuan, resulting in the latter becoming a wholly-owned subsidiary company of the Company.
The Company is a technology company whose planned principal operation is to develop and operate a mobile application or a platform that connects auto repair shops and car owners. One of the features of the mobile application consists of comparisons among different auto repair shops in terms of quality rating and pricing. Auto repair shops that intend to make use of the Company’s user base will be subject to stringent supervision and entrant requirements in order to ensure quality service to users. The Company has also started to provide technical consultation and solution to client regarding the scheduling and optimization on vehicle maintenance to achieve cost effectiveness, intended to convert client into recurring base source of revenue by subscribing to its platform.
The Company plans to venture into other industry with the platform that is intended to develop, thus, the Company has recruited 4 directors to further expand into other industry.
The Company’s executive offices are located at Unit C, 4/F, China Insurance Building, 48 Cameron Road, Tsim Sha Tsui, Kowloon, Hong Kong.
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Results of Operation
For Three Months Ended December 31, 2018 and 2017.
For three months ended December 31, 2018, the Company has not generated any revenue and gross income. For three months ended December 31, 2017, the Company has generated revenue of $4,500 and gross income of $500.
The Company has incurred a net loss of $10,177 and $121,413 for the nine months ended December 31, 2018 and 2017 respectively. The decrease in net loss is mainly due to the decrease in general and administrative expenses.
For Nine Months Ended December 31, 2018 and 2017.
For nine months ended December 31, 2018, the Company has not generated any revenue and gross income. For nine months ended December 31, 2017, the Company has generated revenue of $4,500 and gross income of $500.
The Company has incurred a net loss of $156,030 and $129,762 for the nine months ended December 31, 2018 and 2017 respectively. The increase in net loss is mainly due to the increase in general and administrative expenses.
Liquidity and Capital Resources
As at December 31, 2018 and March 31, 2018, the Company has a cash and cash equivalents of $55,397 and $76,362 respectively. Decrease in cash flow mainly due to the incurred of net loss, settlement of outstanding debt, increase in prepayment and other comprehensive loss.
The Company has a current assets other than cash and cash equivalents of $15,250 and $2,658 as at December 31, 2018 and March 31, 2018 respectively, of which consist solely of prepayment.
The Company has a current liability of $4,380 and $15,500 as at December 31 and March 31, 2018 respectively, of which $17,000 payables has been settled during the nine months period ended December 31, 2018.
Operating Activities
For the nine months ended December 31, 2018 and 2017, net cash used in operating activities was $179,194 and $148,459 respectively, such increase is due to increase in net loss, settlement in other payable and prepayment.
Investing Activities
For the nine months ended December 31, 2018, no cash was generated nor consumed for investment activities while the nine months period ended December 31, 2017, $3,656 was consumed for purchase of equipment.
Financing Activities
For the nine months ended December 31, 2018, $160,000 was generated via issuance of share capital.
For the nine months ended December 31, 2017, $250,447 was generated via issuance of share capital.
Capital Expenditures
There was no capital expenditures for nine months period ended December 31, 2018. For nine months period ended December 31, 2017, there was a capital expenditure of $3,656 of for the purchase of equipment.
Off-balance Sheet Arrangements
We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to our stockholders as of December 31, 2018.
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide information required by this Item.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures:
We carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of December 31, 2018. This evaluation was carried out under the supervision and with the participation of our Chief Executive Officer. Based upon that evaluation, our Chief Executive Officer concluded that, as of December 31, 2018, our disclosure controls and procedures were not effective due to the presence of material weaknesses in internal control over financial reporting.
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis. Management has identified the following material weaknesses which have caused management to conclude that, as of December 31, 2018, our disclosure controls and procedures were not effective: (i) inadequate segregation of duties and effective risk assessment; and (ii) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of both US GAAP and SEC guidelines.
Changes in Internal Control over Financial Reporting:
There were no changes in our internal control over financial reporting during the nine months period ended December 31, 2018 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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We know of no materials, active or pending legal proceedings against us, nor are we involved as a plaintiff in any material proceedings or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any beneficial shareholder are an adverse party or has a material interest adverse to us.
Item 1A. Risk Factors.
We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
On August 24, 2018, Home Boutique International Limited subscribed 333,333 shares of common stock of the Company at $0.30 per share, par value $0.0001 per share. The net proceeds to the Company amounted to $100,000 respectively went directly to the Company.
On September 26, 2018, Home Boutique International Limited further subscribed 200,000 shares of common stock of the Company at $0.30 per share, par value $0.0001 per share. The net proceeds to the Company amounted to $60,000 went directly to the Company.
All the proceeds to the Company are intended for working capital purpose.
Item 3. Defaults Upon Senior Securities
None
Item 4. Mine Safety Disclosures
Not applicable.
None.
| Exhibit No. | Description | |
| 31.1 | Rule 13(a)-14(a)/15(d)-14(a) Certification of principal executive officer and principal financial officer* | |
| 32.1 | Section 1350 Certification of principal executive officer and principal financial officer* | |
| 101.INS | XBRL Instance Document* | |
| 101.SCH | XBRL Schema Document* | |
| 101.CAL | XBRL Calculation Linkbase Document* | |
| 101.DEF | XBRL Definition Linkbase Document* | |
| 101.LAB | XBRL Label Linkbase Document* | |
| 101.PRE | XBRL Presentation Linkbase Document* |
* Filed herewith.
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Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| ECCO AUTO WORLD CORPORATION | ||
| (Name of Registrant) | ||
| Date: January 31, 2019 | ||
| By: | /s/ JASON WONG CHEE HON | |
| JASON WONG CHEE HON | ||
| Title: | President, Director, Secretary and Treasurer | |
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